top of page

Stormy Weather Ahead


Heritage Pay will guide you with exchanging money - whatever the weather

Yesterday's September UK Services PMI report saw the closely-watched gauge of services sector activity drop to 49.5, its lowest level since March. This disappointed expectations of the measure staying above the key 50-mark, which distinguishes an expanding economy from contracting one. As a result, all three UK PMIs are now below 50.

This is has not been seen since the immediate aftermath of the EU referendum result in July 2016.

Ahead of today’s US payrolls report and Fed Chair Powell’s speech, market risk sentiment remains cautious. This follows another weak round of survey data with yesterday’s services PMI/ISM readings across Europe and the US raising further concerns over the health of the global economy. With Chinese markets closed for holiday, Asian equity markets are mixed overnight but most major indices are set to end the week lower.

A string of weak US economic data this week is raising fears that the hitherto resilient US economy may be showing signs of cracking. The ISM manufacturing survey earlier this week dropped to 47.8, the weakest since the global financial crisis. Yesterday’s ISM non-manufacturing survey also missed forecasts, falling sharply to 52.6 from 56.4. Against this background, today’s official US nonfarm payrolls data for September will be another crucial piece of evidence. Strong jobs growth has, after all, underpinned consumer spending and the overall economy in recent quarters. For sure, the monthly payrolls series can be volatile, but the ‘unofficial’ ADP numbers released earlier in the week point to a softening trend of employment growth. Our central forecast for today’s headline figure is a rise of 170k, which is near the top of the range of economists’ forecasts. The consensus forecast is 145k. We also expect the unemployment rate to remain at 3.7%, but see a marginal rise in wage growth to 3.3% from 3.2%. Fed Chairman Powell’s opening remarks this evening at 19:00BST (after the payrolls figures) may be worth waiting for. Also attending the event will be Board Governors Brainard and Quarles. Rosengren (voter) and Bostic (non-voter) also appear in separate events earlier in the day.

The US dollar has been under pressure in recent sessions, as Treasury yields tumble in response to weak economic data. To state the obvious, today’s nonfarm payrolls could be pivotal for the greenback and broader market sentiment. The pound briefly rose above $1.24, also supported by a lukewarm response (i.e. not complete rejection) by the EU on the government’s new Brexit proposals and possibly more conciliatory exchanges in the House of Commons.

To discuss how the above may affect you, please contact your Currency Dealer at Heritage Pay on +44 (0) 203 858 7274.

See you next week!


Featured Posts
Recent Posts
Archive
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square

+44(0)207 117 2934

128 City Rd, London, EC1V 2NX, United Kingdom

Heritage Pay Limited is registered in England and Wales - Company No. 11129859
©Heritage Pay Limited, 2018, All rights reserved..
For our terms, please visit: https://www.currencycloud.com/legal/terms/ 

For clients based in the European Economic Area, payment services for Heritage Pay Limited are provided by CurrencyCloud B.V.. Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 - 298, Mindspace Nieuwezijds Office 001 Amsterdam. CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of an electronic-money institution (Relation Number: R142701).

For clients based in the United Kingdom and rest of the world, payment services for Heritage Pay Limited are provided by The Currency Cloud Limited. Registered in England and Wales No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199).

bottom of page